533 Johnson Ferry Road
Wealth & Pension Services GroupJane Nowak, CFP® CDFA™02/05/15
January 2015 - IRA Rollover Changes Effective Now
When the calendar flipped over to 2015 we were greeted with tax law changes for IRA rollovers. Although many of us won’t be affected by these rule changes, ‘I didn’t know’ is not an excuse when it comes to violating the IRS regulations.
IRA (SEP and SIMPLE IRA owners too) need to know the changes made to IRAs and the ability to receive a check when rolling over your IRA money from one account to another (or back into the same IRA account).
What You Need to Know
Tax Implications of Violating this Rule
§ Treated as an excessive contribution
§ Taxable at an additional 6% per year as long as it stays in the IRA account
What You Need to Do to Avoid Rollover Problems
So Why Did the IRS Make This Change?
Some IRA owners were using their IRA accounts to make tax free loans to themselves. Often, they would have multiple IRA accounts from which they would take 60 day tax free loans all year long.
The intention of the IRA is to save tax deferred for retirement not for providing oneself with tax free loans to fund other business opportunities. So, the laws were changed to close this loophole.
Just the Facts Ma’am, Just the Facts
For more specific information and reference, here’s a great place to start: http://www.irs.gov/Retirement- Plans/IRA-One-Rollover-Per-Year-Rule